1. 1920’s “Crash and Depression”

2. 1929-1933 “The Great Depression Begins”

3. How could the economy appear SO GOOD in the 1920’s and then suddenly TURN SO BAD in 1929? 1- Explain why the economy appeared to be so “healthy” in the 1920’s Wages UP - Stock Values UP - Unemployment Down - People had Confidence - 2-Explain why, in reality, the economy was headed into danger. Credit – Stock Speculation - Farmers in Trouble -Too Many Goods, too little demand

4. Ch. 22 The Great Depression Begins As the prosperity of the 1920’s ended, severe economic problems gripped the nation The Great Depression will have lasting effects on how Americans view themselves and their government Section 1: “The Nations Sick Economy”

5. 1920’s Economic Wheel ( + ) Old industries Railroads Coal Mining Textiles Farming ( - ) New Industries Consumer Goods Credit Stock Market

6. Problems Threaten Economy Old Industries Face “New Competition” –Railroads (Trucks, Buses, Automobiles) –Textiles : North > South (Foreign Competition) –Coal Mining (Oil, Natural Gas, Hydroelectric) Farmers Suffer From “Overproduction” –WWI: expanded, borrowed for new machinery –Congress > “Price Supports” - Coolidge Vetoes by 1929 “Rich > Richer, Poor > Poorer -Stock Market (Buying on Margin)

7. FarmersFarmers (Overproduction = low prices) Debt buying “Farming Machines” Too many Goods, Too little Demand *OVERCONSUMPTION*Too many Goods, Too little Demand *OVERCONSUMPTION* -Production v. Consumption Unbalanced Foreign TradeUnbalanced Foreign Trade -High Tariffs / Not buying U.S. goods Buying on CreditBuying on Credit (Huge personal DEBT) Stock MarketStock Market Stock Speculation (Buying on Margin - Credit) –Inflates the value of the stock

8. DEPRESSION Uneven Prosperity - Rich v. Poor Buying on Credit -increase in Debt Stock Market -Buying on Margin -Speculation Too many Goods Too little Demand -Overproduction Farmers - More Crops -Low Prices Unbalanced Foreign Trade -HIGH Tariffs (NO export) Mechanization -Machines = Less Jobs

9. “DEPRESSION” Uneven Income Distribution Too much “Easy Credit” Stock Speculation (Over Valued) Over Consumption (production-purchases) Unbalanced Foreign Trade (less jobs) –Mechanization (Machines = less jobs) EFFECTS Millions lose their jobs G ross N ational P roduct Falls dramatically Many Banks fail (bankrupt) rise in Poverty = Health & Social problems Global Economy Suffers

10. Stocks -investing in a company by buying shares in that company Value - based on strength / weakness of Co. people buying stocks can also INFLATE the value of a stock Dow Jones Industrial Average –S & P 500 Buying on Margin Speculation

11. Slipping Economy Signals Herbert Hoover wins 1928 Election Economic Wheel “Slows Down” 1926 - 1929 Construction slowing (others) -buying slows, productions slows, (spiral) Oct.29, 1929 “ Stock Market Crashes ” - BLACK TUESDAY (Panic continues 2 weeks) people lose CONFIDENCE

12. U.S. ECONOMY 1929-1933 Gross National Product Unemployment

13. (1929 - 1932) G ross N ational P roduct National Income dropped 1/2 85,000 business closed 400,000 farms foreclosed 6,000 Banks Failed (1/4) 12 Million Unemployed (1/4) Hunger & Suffering NO Direct Relief